TORONTO – A deal with provincial police isn’t driving up the cost of policing in Ontario, the government said Wednesday, despite complaints that generous wage hikes and benefits are leading to expensive municipal contracts.

“We have certainly seen a decline in the average rate of settlement, and the last time I saw, Ontario was below the private sector,” said Finance Minister Dwight Duncan.

“When contracts are bargained there are certain things you get in exchange of others and that’s what the bargaining process is about.”

“The province has repeatedly taken steps to set a pattern of steadily increasing costs in policing,” Mukherjee wrote.

“It is in this context that we are left to negotiate a reasonable collective agreement.”

Municipalities have also complained about the provincial police wage hike, finalized after the government promised a two-year wage freeze for the public sector last year and urged police and municipalities to do their part to rein in salaries.

The increase, they said, would have a negative impact on smaller communities that rely on the provincial force and are struggling to keep their budgets in line, as well as on bigger cities where local police forces are likely to ask for the same increase.

But Duncan said Wednesday the increase to the provincial police was simply a way to catch up with other forces.

“It’s an ongoing challenge but I believe we’ve gotten a reasonably good deal, certainly a better deal than Toronto,” said Duncan, referring to a tentative deal that would grant the city’s cops wage hikes totalling 11.5 per cent over four years.

The government gave provincial police a five per cent increase this year, and guaranteed an across-the-board wage hike in 2014 that would make them the highest paid police officers in the province.

In his letter, Mukherjee also asked for a review of the arbitration process, noting that arbitrators usually replicate negotiated agreements. That can lead to pay raises despite the government’s wishes, he said, since economic conditions and the municipality’s ability to pay receive little consideration.

It’s a concern shared by the Progressive Conservatives, who said the system needs changes to ensure fairness to Ontario taxpayers.

“Right now it’s sad when you see managers who don’t have confidence in the system so they are trying to outguess arbitrators or maybe outdo arbitrators to keep labour peace,” said Progressive Conservative critic Jim Wilson.

“That’s just the wrong way to go about bargaining in good faith in this province.”

Duncan dismissed calls to overhaul the arbitration process, saying its critics have provided no alternatives to the current system.